MonitorsPublished on Nov 19, 2022
Energy News Monitor | Volume XIX, Issue 20
Quick Notes

India in Multilateral Climate Negotiations: Early Moral Imperatives


Towards the end of the 27th conference of parties (COP27) of the United Nations framework convention on climate change, almost all of the agenda items on long-term climate finance (LTF), the adaptation fund (AF), the standing committee on finance (SCF), the green climate fund (GCF), the global environment facility (GEF), the seventh review of the financial mechanism, the new collective quantified goal on finance (NCQG) and the funding arrangements responding to loss and damage associated with the adverse effects of climate change remained unresolved. This is not surprising as the division between the developed and developing countries in assigning blame over the cause of climate change and liability for damages has persisted since multilateral climate negotiations began over three decades ago.  India’s early positions in climate negotiations that were closer to the moral high ground reflected this division.

Poverty and Need: Greatest Polluters

The United Nations Conference on Human Environment in 1972 in Stockholm marked the beginning of a shift away from colonial and post-colonial approaches to environmental protection in India that over-emphasized State led management and conservation of the environment to protect commercial returns from natural resources such as forests and water bodies. At the UN conference in Stockholm, the Indian Prime Minister Indira Gandhi, who was the only head of State to address the conference other than the Swedish Prime Minister, brought people and their development into the discourse on environmental protection and posed some inconvenient questions:

‘Are not poverty and need, the greatest polluters? For instance, unless we are in a position to provide employment and purchasing power for daily necessities of the tribal people and those who live in and around our jungles, we cannot prevent them from combing the forest for food and livelihoods; from poaching and from despoiling the vegetation.  When they themselves feel deprived, how can we urge the preservation of animals? How can we speak to those who live in villages and slums about keeping oceans, the rivers and air clean when their own lives are contaminated at the source?  The environment cannot be improved in conditions of poverty, nor can poverty be eradicated without the use of science and technology’.

What influenced Mrs Gandhi’s speech is not known, but the report on environment and development that emerged from a seminal meeting of experts and policy makers in Founex, Switzerland in 1971 served as an intellectual basis for the Stockholm conference the following year. The Founex Report as it came to be known, clearly differentiated between the environmental problems of developed countries and those of developing countries.  While the report blamed ‘development’ for the environmental problems of the developed countries, it blamed poverty and the lack of development for environmental problems in developing countries.

Prime Minister Indira Gandhi’s speech reflected this conclusion and elaborated on the observation in the Founex report that ‘not merely the quality of life but life itself was endangered by the poor quality of water, housing, sanitation, nutrition and by sickness, disease and natural disasters.’ The overwhelming influence of views from the global south in the Founex report could be traced to the intellectual and political weight of Gamani Corea, an illustrious economist from Sri Lanka who chaired the panel of experts at Founex. The Stockholm conference adopted the views of the Fournex report and declared that developing countries should direct their effort towards development as a solution to local environmental degradation. The compelling questions that Mrs Gandhi raised in Stockholm are consistent with the conclusions of the report and they remain at the core of the developing world’s narrative on climate change even today.

Environmental Legislation

The Government of India adopted the 26 declaratory principles that emerged out of the Stockholm conference wholeheartedly as it was consistent with its pursuit of nation-building through economic development. A suite of laws such as the Wildlife Protection Act 1972, Water (Prevention and Control of Pollution) Act 1974 that aimed at local environmental issues were enacted and these were followed by an amendment of Article 48A of the Indian Constitution that transferred the ‘locus of administrative control over environmental conservation from the States towards the Federal Government’. Prime Minister Indira Gandhi also established the National Conference on Environmental Planning and Coordination in 1972 and in 1981 when she was re-elected to lead the country, she established the Department of Environment and Forests. In 1985, this department was elevated to become the Ministry of Environment and Forests (MOEF). These developments were also consistent with the recommendations of the Founex report which explicitly called for the establishment of a separate Ministry for the protection of the environment.

Negotiating Positions in Multilateral Platforms

At the second meeting of the intergovernmental negotiating committee in Geneva in June 1991, India drafted a proposal for a convention that suggested a per person approach to the handling of national carbon dioxide (CO2) emissions. India also maintained the distinction between developed and developing nations under Article 3 of the UNFCCC ratified in 1994 which stated that:

‘The parties should protect the climate system for the benefit of the present and future generations of humankind, on the basis of equity and in accordance with their common but differentiated responsibilities and their respective capabilities’

Under the principle of ‘common but differentiated responsibilities,’ (CBDR) developed nations were expected to take the lead in combating climate change and its adverse effects giving adequate space for the development of underdeveloped countries. At the first Conference of Parties (COP1) of the UNFCCC in 1995, India presented a green paper that called for a 20 percent reduction in emissions from rich countries.  At COP3 in 1997, India endorsed the Kyoto Protocol as an Annex II member which carried no responsibility towards emission mitigation.  In this period, many of the commentaries on India’s position by established Indian scientists and economists strongly endorsed India’s stand.  For example, a 1994 paper commented that since the global north was using environmental space far larger than its fair share, any transfer of funds from the north to the south must be treated as rent for environmental space rather than aid. A 1997 paper observed that ‘India should not be rushing to save the global commons on anybody’s terms but its own’ and that ‘global warming was best seen as an additional problem to be managed in an increasingly unforgiving and predatory international economic realm rather than an environmental problem facing the global community of nations’.

Nation State as Moral Agent

Commentaries from western research bodies portrayed India’s stand in negative light and labelled India as a ‘nay-sayer’ in multilateral negotiations. India’s stand was looked down upon as one based on ‘third-world’ moral imperatives and India was said to be acting against its own interests installing the ‘progress’ of climate negotiations because a large number of its population was exposed to natural calamities such as floods and drought which were presumably caused by global warming.

Despite the criticism, India did not deviate from its negotiating position until the early 2000s.  In most negotiating platforms, it argued against binding mitigation commitments and called for financial aid for the adoption of new technologies and for adaptation measures. In 2002, India hosted COP8 and emphasised the need for financial resources to help developing countries adapt to the adverse impacts of climate change.  The Delhi Ministerial Declaration reflected India’s position that adaptation is as important as mitigation and focused on ways to help developing countries to adapt to climate change. It also urged Governments to promote technological advances through research and development, increase renewable energy resources and also promote the transfer of technologies that could potentially help reduce GHG emissions – especially carbon dioxide from the burning of fossil fuels.

The global negotiating environment favoured India’s position in this period. The European Union had emerged as the driver of progressive policy making on curtailing GHG emissions, while the United States was perceived not merely to be lagging behind but was also seen to be indulging in gaming the international regime building process. Within this transatlantic divergence, countries such as India and China which were yet to be labelled ‘rising powers’ managed to avoid the limelight. The United States’ reliance on scientific uncertainties and economic rationality as justifications for delaying action on controlling GHG emissions provided a convenient shield for large developing countries to hide behind.  Unintentionally, India’s reluctance to commit to GHG emissions also provided a cover for many countries, not least the United States which was intent on avoiding mitigation action. If India had made a binding commitment to reduce carbon emissions, the moral pressure on the United States to commit to emission reductions would have been significant as its carbon emissions were roughly twenty times that of India on a per capita basis at that time.

India’s strong opposition to mitigation commitments also served the interests of other large emerging nations such as China and Brazil who sought to maintain a relatively low profile in climate negotiations. China relied on the norms of non-interference, sovereignty, and the right to development to avoid committing to emission mitigation targets. Brazil, which initially saw pressure on environmental protection as ‘outside interference’, shifted to a more open position after it hosted the Earth Summit (United Nations Conference on Environment Development) in 1992.

During this period, India’s domestic policy reports such as the Five-Year Plans began to reflect the influence of the reports from the United Nations’ Intergovernmental Panel on Climate Change (IPCC).  For example, the working group on the environment for the 9th five-year plan (1997-2002) included in its terms of reference, the assessment of adverse impacts of climate change on India. Perversely, the rhetoric on GHG emission reduction was even used to thwart domestic environmental movements such as the Narmada Bachao Andolan (NBA) which sought to protect the river Narmada and the people that depended on the river from the construction of large dams across the river.   Delivering a verdict favouring the construction of dams on the river Narmada in 2000, the Supreme Court of India observed that ‘global warming was a major cause of concern, and that hydropower could be termed ecologically friendly as its contribution to GHG emissions was negligible’.   The judgement also reflected India’s emphasis on development and the removal of poverty as the means to environmental protection when it observed that ‘poverty was the cause of environmental degradation, and that people would prosper from improved irrigation through the construction of the dam’.

What is instructive to note is that in the case of India, the portrayal of the global environmental conflict as a struggle of the poor against the rich with itself at the forefront sustained its dominance despite the fact that it originated outside the government.  The endurance of this position lies in the fact that it was consistent with India’s traditional bargaining positioning as leader of the developing world in north-south negotiations which reflected a mixture of domestic pressure and a preference for a certain world order that favoured the poor.  This has changed since the size of India’s economy grew to match that of large powerful countries.  India has since moved away from the moral high ground to be accommodated in the economic high table.

Abridged version of the paper India’s Approach to Climate Negotiations:  From the South to the North?

Source: Global Carbon Project 2021

Monthly News Commentary: NON-FOSSIL FUELS

Solar Manufacturing Sector attracts Investment


Solar Manufacturing

Multi-national solar energy solutions provider Goldi Solar plans to infuse over INR 50 bn (billion) (US$ 0.61 bn) as a part of its business expansion plans, particularly in modules, cells and raw material manufacturing capabilities. It plans to commence production at its cell manufacturing unit in Gujarat. Goldi Solar is one of the leading Indian solar brands. The company manufactures panels, provides EPC services, and is an independent power producer. It has two facilities of 2.5 GW (gigawatt) at Pipodara and Navsari in Gujarat. Subsequently, it will expand its capacity to 5 GW. Goldi Solar plans to recruit over 4,500 people across various functions, increasing its workforce to over 5,500, including the existing workforce. Goldi Solar will conduct three-month certification programmes at a skill development centre that it plans to open in collaboration with the NSDC (National Skill Development Council) in Navsari to train new recruits for a career in renewables in Gujarat. Terming renewables as the future of energy, the firm’s plans of launching a new product line and expanding capacity for module manufacturing are designed to increase the supply of clean energy and motivate its large-scale replacement of fossil fuel. In India, the country’s goal toward 500 GW of non-fossil-fuel energy sources by 2030 could create 3.4 million new job opportunities (of short or long duration), or about 1 million direct full-time equivalents, the International Renewable Energy Agency and the International Labour Organization joint report said. In 2020-21, India created 863,000 green jobs, of which 217,000 were in solar photovoltaic vertical and 414,000 in hydropower, the joint report said recently. Jobs in solar photovoltaic (PV) in 2021, the fastest-growing sector, accounted for more than a third of the total renewable energy workforce. India added 10.3 GW of solar PV capacity in 2021, up from 4.2 GW installed in 2020, the joint report said. India also aims to reduce the emissions intensity of GDP (Gross Domestic Product) by 45 percent.

The pieces to develop end-to-end solar panel manufacturing capabilities are all coming together in the Reliance Industries Limited (RIL) announcement to acquire a stake in solar glass coatings provider, Caelux. RIL announced to acquire a 20% stake in US-based solar-tech firm, Caelux, for US$12 mn (million) as it expands its value chain to improve capabilities in solar panel manufacturing and related materials. Caelux is testing its coating solutions for solar glass with nano materials – Perovskites (Calcium Titanium oxide – a combination of metals and non-metals) which when arranged in a certain way under the right conditions, produce materials that can help improve the efficiency of the panels by up to 20 percent over the 25 year life of the solar panel.

RE Policy and Market Trends

Prime Minister (PM) Narendra Modi declared Modhera in Gujarat’s Mehsana district as India’s first 24×7 solar-powered village. He said that Modhera was known for the Sun temple, now it will also be known as a solar-powered village. Making Modhera the country’s first round-the-clock solar-powered village involved developing a ground-mounted solar power plant and more than 1,300 rooftop solar systems on residential and government buildings.

Tata Power plans to develop around 10,000 MW (megawatt) of renewable energy capacity, mainly solar energy, in the next five years in Rajasthan, and also build a robust electric vehicle charging infrastructure. Participating in the ongoing Invest Rajasthan summit in Jaipur, it stated that it plans to develop up to 8,000 MW of utility scale projects, 1,000 MW of solar rooftops and 1,50,000 solar pumps in the next five years in the state. Tata Power, along with its fully-owned subsidiary Tata Power Solar will expand its presence in the state to generate clean energy through solar power. Rajasthan is an important state for Tata Power’s renewable business. It presently has a portfolio of 4,939 megawatt peak (MWp). Till date, Tata Power has commissioned 2,066 MW in Rajasthan and around 2,873 MW capacity of solar projects are under construction, which will be completed in the next 12-24 months. With respect to solar pumps, Tata Power plans to set up around 1,50,000 pumps in the next five years in the state. The company has so far installed nearly 21,600 solar pumps in Jaipur, Hanumangarh, Ganganagar, Jalore and Bikaner. Tata Power through its rooftop services has a cumulative installed capacity of 65 MW in Rajasthan.

The growth in wind and solar power capacity restricted the expansion in fossil fuel electricity generation in India by 3 percentage points in the first half of 2022, according to a UK-based energy think tank, Ember, report. The report said renewables met all of the rise in global electricity demand in the first half of 2022, preventing any growth in coal and gas generation. However, it said the use of coal in India rose 10 percent because of a sharp rebound in electricity demand from the lows early last year when the Covid-19 pandemic struck hardest. In China, the growth in wind and solar led to a three reduction in fossil fuel power. In the US (United States), it slowed down the rise in fossil fuel power from 7 percent to just 1 percent. In the EU (European Union), fossil fuel power rose by 6 percent but it would have been 16 percent without growth in wind and solar, the report said.

The Punjab Government has sought Central Financial Assistance (CFA) under the PM-KUSUM Scheme to facilitate solar-enabled agriculture pump sets up to 15 Horse Power (HP) capacity in the State. Punjab had been kept out of the ambit of the scheme. It said though the Centre made a provision for providing CFA to the farmers of the northeast and hilly States for agriculture pumps up to 15HP capacity on 1 August 2022, the facility is available only for agri-pumps up to 7.5HP in Punjab. The MNRE (Ministry of New and Renewable Energy) has allocated targets for solarisation of 50,000 off-grid solar pumps under Component-B and 1.25 lakh electric motor pumps set under Component-C to Punjab.

The Union Cabinet approved the Production Linked Incentive (PLI) Scheme on ‘National programme on High Efficiency Solar PV Modules’ for achieving manufacturing capacity of gigawatt scale in high efficient Solar PV modules. The decision is aimed towards building an ecosystem for manufacturing high efficiency Solar PV modules, Union Minister Anurag Thakur said. A grant worth INR195 bn (US$2.28 bn) has been passed by the government for the manufacturing project. About 65,000 MW per year manufacturing capacity of fully and partially integrated, solar PV modules will be installed under the project.

Kolkata has become the first Indian city to join the network of 72 global cities with its endorsement of a ‘fossil fuel-free and climate-resilient future’ through a set of short-term and long-term goals. Kolkata mayor Firhad Hakim signed the fossil fuel non-proliferation treaty propagated by the Climate Action Network of South Asia (CANSA) to join the league of cities attempting to dramatically reduce carbon emissions. By signing the treaty, Kolkata Municipal Corporation (KMC) requires to phase out fossil fuels by applying equity principles, paving the path for a smooth energy transition. Kolkata joins Paris, Los Angeles, Vancouver, Lima and 60 other civic bodies and becomes the largest city to support the international initiative to phase out oil, gas, and coal production responsible for more than 80 percent of CO2 (carbon dioxide) emissions in the last decade.

RoofTop /Distributed Solar Projects

The Uttar Pradesh (UP) government has decided to develop solar rooftop projects in government and semi-government buildings and offices in the state as part of its new renewable energy initiative. The department of New and Renewable Energy Development Agency (NEDA), the nodal body, has already invited online bids from prospective bidders for designing, manufacturing, supplying, erecting, testing, and commissioning of 25-2,000 kW (kilowatt) grid-connected solar PV (photovoltaic) projects on government buildings and offices. The selected contractors will also be responsible for maintaining and operating the rooftop solar projects for 25 years.

Tata Power has inked a pact to develop a 4 MWp solar project at Tata Motors’ Pune plant. The installation is collectively expected to generate 5.8 million units (MU) of electricity, potentially mitigating over 10 lakh tonnes of carbon emission. This is equivalent to planting over 16 lakh teak trees over a lifetime. Until FY22, Tata Motors at its Pune plant, including at its passenger and commercial vehicle manufacturing facilities, deployed 15 MWp solar project, generating 21 million kWh (kilowatt hour) of renewable electricity. Over the next few years, the company plans to expand the solar capacity of its Pune plant to meet the growing demand for renewable energy. In FY22, across all its plants in India, the company generated 92.39 million kWh (MU) of renewable electricity for its manufacturing operations, which is 19.4 percent of the total power consumption.

Utility Scale Solar Projects

Adani Green Energy Limited (AGEL) has commissioned the world’s largest wind-solar power plant of 600 MW capacity in Jaisalmer, Rajasthan. The plant has a power purchase agreement with Solar Energy Corporation of India (SECI) at INR2.69/kWh for 25 years. The project consists of 600 MW solar and 150 MW wind plants, it said adding it shall not only reduce the intermittency of renewable energy power but also help the country in optimal utilisation of the transmission network. In May 2022, AGEL operationalised India’s first hybrid power plant with a capacity of 390 MW in Jaisalmer. With the commissioning of the 600 MW plant, AGEL has a total operational generation capacity of 6.7 GW, including an operational hybrid power generation capacity of 1 GW, the largest in the world, it said.

Wind Power

Suzlon Group has bagged an order for the development of 144.9 MW of wind power projects for Aditya Birla Group. Suzlon will install 69 units of wind turbine generators (wind turbines) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 2.1 MW each. The project is located at sites in Gujarat and Madhya Pradesh and is expected to be commissioned in 2023. Suzlon wind turbines typically range over 70-80 percent on domestic content and are manufactured in the country through a thriving domestic value chain, it claimed. Green power from the project will go for captive use for their manufacturing facilities and other needs, thereby helping create a sustainable and Aatmanirbhar Bharat. A project of this size can provide electricity to 0.94 lakh households and curb 3.72 lakh tonnes of CO2 (carbon dioxide) emissions per year.

AGEL has commissioned a 325 MW wind energy plant in Dhar district of Madhya Pradesh (MP). With the commissioning of this plant, its operational generation capacity has increased to 6.1 gigawatt (GW), AGEL said. The plant has two 25-year Power Purchase Agreements (PPAs) with Solar Energy Corporation of India (SECI), one for 274.4 MW energy and another for 50 MW power, at a tariff of INR2.83 per kwh (kilowatt hour). AGEL has a total of 20.4 GW of renewable energy portfolio which includes the operational ones, under-construction, awarded and assets under acquisition catering to investment-grade counterparties.

Rest of the World


Power generation from renewables fully covered Greece’s electricity demand over a few hours, for the first time in the history of the country’s electricity system, its independent power transmission operator IPTO said. IPTO said that renewables accounted for 100 percent of the power generation for at least five hours, reaching a record high of 3,106 megawatt hour (MWh). The share of Greek renewables from solar, wind and hydro stood at 46 percent of the country’s power mix in the eight months to August this year, from 42 percent in the same period in 2021, according to a Greece-based environmental think-tank, The Green Tank. Greece aims to attract about 30 billion  euros (US$30.03 bn) in European funds and private investments to upgrade its electricity grid and more than double its green energy capacity to account for at least 70 percent of its energy mix by 2030. It plans to have 25 GW of installed renewable energy capacity from about 10 GW but analysts said Athens might reach that target sooner. IPTO has been investing in expanding the country’s power grid to boost power capacity and facilitate the penetration of solar, wind and hydroelectric energy.

Romanian oil and gas firm OMV Petrom will team up with state-owned lignite power producer CE Oltenia to build four photovoltaic parks that should provide electricity to the national power grid in 2024. The plan will cost around €400 mn (US$391.76 mn), mostly from European Union funds, and the parks will have a combined installed capacity of around 450 MW, Petrom, which is majority-controlled by Austria’s OMV, said. Romania has committed to phasing out coal by 2032 and replacing it with gas, nuclear and renewable energy. The new parks, which will be built on the sites of former mining operations operated by CE Oltenia in southern Romania, will boost the country’s installed solar energy capacity by a third from around 1.4 GW currently. Romania had planned to restructure CE Oltenia by 2026 and replace its old capacity with solar power and gas, although Energy Minister Virgil Popescu has said the current energy crisis could push back the deadlines. OMV Petrom aims to build over 1 GW of renewable power by 2030, including through partnerships.

Portugal has raised the target for its debut offshore wind power auction to 10 GW, Environment Minister Duarte Cordeiro said, aiming to “move faster” on the country’s energy transition. In June, Cordeiro put the capacity on offer at the auction due next year at 6-8 GW, which was already double the government’s target at the start of 2022. The energy crisis caused by Russia’s invasion of Ukraine is forcing countries to bet more on new technologies to boost renewable energy generation, such as wind and solar, which was already happening as part of a global shift from fossil fuels. Floating wind technology, seen as the final frontier in the offshore wind industry, has gained traction in countries such as Britain, France and parts of south-east Asia. Portugal has a small, 25 MW floating wind project off its Atlantic coast. Portugal has 7.3 GW of hydroelectric capacity and 5.6 GW of onshore wind, which together represents 83 percent of its total installed capacity.

EU lawmakers voted to raise the bloc’s targets to expand renewable power and save energy, backing proposals that had been made more ambitious in a bid to quickly end Europe’s reliance on Russian gas. The Parliament backed a target to get 45 percent of EU energy from renewable sources by 2030, compared with 22 percent in 2020. Lawmakers also backed rules that would reduce by 2030 the share of wood-fuelled energy counted towards the EU’s renewable energy targets. EU lawmakers also backed a proposal to raise the bloc’s target for primary and final energy savings to 14.5 percent by 2030 compared with expected energy use, and set binding contributions for every country. The two proposals are central to a package of EU policies currently being negotiated, which aims to deliver the bloc’s climate change target to slash net emissions 55 percent by 2030, from 1990 levels.

Africa & Middle East

Saudi Arabia has announced five new projects to produce electricity using renewable energy. The Saudi Power Procurement Company said the projects are the fourth phase of the kingdom’s National Renewable Energy Program of the Energy Ministry. These projects, whose total capacity reaches 3,300 MW, include three wind energy projects and two solar energy projects, it said. The total production of wind energy projects stands at 1,800 MW, which are distributed for a project in Yanbu with a capacity of 700 MW, another in Al-Ghat with 600 MW and a third in Waad Al-Shamal with 500 MW. The total capacity of solar projects reaches 1,500 MW, distributed to a project in Al-Henakiyah with 1,100 MW and another in Tubarjal with 400 MW. The Kingdom targets to reach the best energy mix to produce electricity from renewable energy resources and using gas with 50 percent for each of them and replace the fuel used to produce electricity by 2030.

Asia Pacific

Australian software mogul Mike Cannon-Brookes was named chairman of clean energy start-up Sun Cable, which is seeking to secure funds for a proposed A$30 billion-plus (US$19.3 billion-plus) solar power export project. Singapore-based Sun Cable plans to supply solar power from Australia to Singapore and eventually Indonesia through the world’s longest subsea high voltage cable, linked to a 17-20 GW solar farm, as well as an energy storage facility of up to 42 gigawatt hour (GWh) in Australia’s Northern Territory.

TotalEnergies will start offering biofuels as a bunkering fuel to its customers in Singapore from next year, a senior executive at the French energy giant said, as the company seeks to reduce its emissions in shipping. The move would reduce greenhouse gas emissions from shipping by 20-25 percent. The shipping industry accounts for nearly 3 percent of the world’s CO2 (carbon dioxide) emissions and the International Maritime Organization (IMO) is seeking to halve the industry’s greenhouse gas emissions by 2050 from 2008 levels. This target will require rapid development of zero- or low-emission fuels and new designs for ships.

Indonesia has issued a regulation to encourage renewable energy use in one of the world’s biggest carbon emitters, including a plan to retire some coal plants early, a presidential decree said. The world’s largest exporter of coal aims to increase the proportion of renewables in its energy mix to 23 percent by 2025 but has only reached around 12 percent so far. Coal currently powers around 60 percent of the country’s electricity needs. Indonesia set a goal last year to achieve net-zero emissions by 2060 and pledged alongside dozens of other countries to phase down coal use to help limit global warming to less than 1.5 degrees Celsius above pre-industrial levels. The government set a new pricing system for each type of renewable energy source – geothermal, hydro power, and solar power – to encourage investment. Developers previously had to go through a lengthy negotiation process with the state utility company to reach a pricing agreement. To boost renewable energy investment, the government will also give fiscal incentives including financing facilities and ease of licensing in forest areas for renewable energy development. The International Energy Agency (IEA) said Indonesia needs to ensure policy reforms including introducing transparent and competitive tariffs and predictable project pipelines to pave the way for renewable power and to reduce reliance on coal.

News Highlights: 12 – 18 October 2022

National: Oil

Scindia urges states and UTs to reduce tax on jet fuel

18 October: Union Civil Aviation Minister Jyotiraditya Scindia said there is a huge demand for air travel after the pandemic and urged eight states and Union Territories (UTs) to reduce the tax on jet fuel. Air traffic growth will be driven by smaller cities, he said. Domestic air traffic is inching closer to pre-Covid level and in recent times, the daily passenger numbers crossed the four lakh mark twice. Scindia said that Value Added Tax (VAT) on jet fuel is still high in eight states and Union Territories in the range of 20-30 percent and urged them to reduce the rate. Jet fuel cost accounts for a significant part of an airline’s operational costs. The Minister requested Goa, Assam, Delhi, Maharashtra, West Bengal, Rajasthan, Bihar and Tamil Nadu to reduce the VAT on Aviation Turbine Fuel (ATF). Currently, 28 states and UTs have VAT on jet fuel in the range of 1-4 percent, he said.

India’s first SPM facility at IOC-Vadinar berths the 6,000th oil tanker

17 October: India’s first unloading single point mooring (SPM) facility, commissioned by Indian Oil Corporation (IOC) in 1978 at Vadinar in Gujarat, achieved a significant milestone with the berthing of the 6,000th oil tanker. Oil tanker MT Yio, a Liberian very large crude carrier carrying Basrah crude oil from Iraq, berthed at the Vadinar SPM, the company said. The 3 lakh kilo litres of crude oil that MT Yio is carrying is adequate to meet about 40 percent of the daily fuel requirement of the entire nation. IOC currently operates two SPM terminals at Vadinar, in the south of the Gulf of Kutch, for unloading crude oil, brought in tankers for transportation to shore tanks through pipelines, of which around 14 km is subsea. Subsequently, the crude is transported through cross-country pipelines to IOC’s mega refineries at Vadodara in Gujarat, Mathura in Uttar Pradesh and Panipat in Haryana.

Crude price hike will weaken oil companies if net realisation doesn’t go up: Moody’s

17 October: A INR220 billion one-time grant to the three oil marketing companies (OMCs) by the Centre would cover their losses on sales of domestic LPG (liquefied petroleum gas) if they still incur losses on the sale of petrol and diesel, Moody’s Investors Service said. The central government approved the grant to Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) to cover losses on sales of domestic LPG between June 2020 and June 2022.

Gujarat government to give two free LPG cylinders to Ujjwala beneficiaries

17 October: The Gujarat government decided to give free liquefied petroleum gas (LPG) cylinders twice a year to beneficiaries of the Pradhan Mantri Ujjwala Yojana. Education Minister Jitu Vaghani said that there are 38 lakh beneficiaries under the scheme and the decision will save INR6.5 bn for poor families. The moment a consumer gets one’s cylinder refilled, immediately, the money will be transferred to the account, he said.

India to produce 25 percent of its oil demand by 2030: Puri

15 October: Indian petroleum industry is at the cusp of opportunity and will be able to produce 25 percent of its crude oil demand by 2030, Union Petroleum and Urban Affairs Minister Hardeep Singh Puri said. At present, five million barrels of petroleum is being consumed in our country every day and it is also increasing by three percent, which is higher than the global average of nearly one percent, Puri said. Ethanol-blending percentage in petrol increased to 10 percent in nine years. The Minister said that the ethanol-blend percentage in petrol has increased from 0.67 percent in 2013 to 10 percent in May 2022, i.e., five months ahead of schedule. Petroleum Secretary Pankaj Jain said the geology experts should utilise this opportunity to elevate their contribution in the context of increasing demand and scarcity of energy sources.

India pushes oil refiners to diversify after surprise OPEC+ cuts

14 October: India said it will speed up its diversification of oil imports to hedge against any surprise output cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies. As the world’s third largest consumer and importer of oil, India buys about 85 percent of its needs from overseas, while its energy demands are set to rise to power its economic expansion. Output cuts could temporarily maximise revenue for OPEC+ producers, but could tip the world into recession, India’s Oil Minister Hardeep Singh Puri, said. Indian state fuel retailers have not raised pump prices since April and Puri said the country will be able to navigate the terrain “with confidence”. Indian companies have signed new oil supply deals with Colombia and Brazil and are scouting to buy stakes in oil producing assets overseas, Puri said. India is also upset with Saudi Arabia for charging an Asian premium on oil supplies and Indian state refiners last year briefly cut oil imports from the kingdom after output cuts by OPEC+, led by the Saudis. The share of Middle Eastern and OPEC’s oil in India’s overall imports has been declining for some years. Puri said that India’s oil imports from Russia are driven by discounts offered on sales.

Government clears INR220 bn grant to 3 oil PSUs to cover LPG losses

12 October: The Cabinet approved a one-time grant of INR220 bn to three state-owned fuel companies to cover their losses incurred over selling cooking gas or LPG (liquefied petroleum gas) below cost over the past two years. The three firms – Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) – sell domestic LPG at government-regulated prices to consumers. The grant will be for the losses they incurred on selling LPG below cost to consumers from June 2020 to June 2022. International prices of LPG rose by around 300 percent from June 2020 to June 2022, the government said.

National: Gas

CNG becomes more expensive than petrol in Lucknow once again

17 October: After a relief for a brief period, CNG (compressed natural gas) has once again become more expensive than petrol. This happened for the second time but in total it was the fifth hike in the current financial year. Now the consumer must pay INR97 per kg (kilogram) for CNG in Lucknow, Agra and Unnao, which was INR 95 per kg earlier. Similarly in Ayodhya, the vehicle owner has to pay INR 98.45 per kg, which is INR 96.45 per kg. The current petrol price in Lucknow is INR 96.57 per litre, while diesel is sold in retail at INR 89.91 per litre. In April, CNG retail cost was INR 84.25 per kg.

Punjab Police committed to ensure safety of national assets oil and gas

13 October: Punjab Director General of Police (DGP) Gaurav Yadav, who is also the chairman of the Onshore Security Coordination Committee (OSCC), assured complete assistance and support from the Punjab Police to the Oil and Gas Companies to ensure the security and safety of oil and gas, which are vital national assets. The DGP, chairing the third OSCC meeting organised by GAIL (India) Limited in Chandigarh, reviewed the safety measures in place for security of oil installations in the state. A number of issues such as the Standard Operating Procedures (SOPs), scaling up of security, keeping vigil via CCTVs and Drone Surveillance was discussed during the meeting, which was aimed at effective coordination between the stakeholders. DGP Yadav said that although Punjab has been secure so far, the Police and Oil-Gas Companies need to be alert and aware all the time, and should work together for the safety of the oil and gas. He also stressed the need to hold district level security coordination meetings for greater synergy between oil-gas companies and district police.

National: Coal

India’s 99 new coal mine projects conflict with net zero by 2070: GEM

13 October: A temporary coal shortage has emboldened the Indian government to press ahead with plans to develop 99 new coal projects with a production of 427 million tonnes per year (mtpa), a briefing by Global Energy Monitor (GEM) said. Land for new coal projects continues to be auctioned despite the government’s pledge to achieve net zero emissions by 2070 and even though 36 percent of capacity at operating mines goes unused. India’s 427 mtpa of planned new coal mine capacity places it second in the world after China with 596 mtpa. In some major mining regions, like Jharkhand and Odisha, the industry has over 100 million tonnes (MT) in unused capacity at active mine sites, amounting to over 40 percent of unused mine capacity in those states. GEM said new mines would not open fast enough to meet coal demand in the short term and would be hampered by the same problems as existing mines, such as low labour productivity, competition from renewables, land acquisition issues, and infrastructure constraints. The 99 new coal projects threaten to displace at least 165 villages and affect 87,630 families, of which 41,508 families live in scheduled areas of India, which have a predominant population of tribal communities.

CIL will achieve 1 bn tonne coal production target by FY26: Coal Minister

12 October: Coal India Ltd (CIL) will achieve 1 billion tonne coal production target by 2025-26 as against the earlier timeline of 2023-24 given the COVID-19 pandemic, Coal Minister Pralhad Joshi said. CIL accounts for over 80 percent of the domestic coal output. CIL was earlier eying 1 billion tonne coal production by 2023-24. He said as far as thermal power plants are concerned, there is an average coal stock of 24 million tonnes (MT) and day-to-day stock of fossil fuel is adding. Coal output by CIL in the current financial year is expected to be 700 MT and there would be additional output of 200 MT from other sources. For setting up large-scale coal-to-chemical projects through the surface coal gasification route, CIL signed three separate MoUs with BHEL, Indian Oil Corporation Ltd (IOCL) and GAIL (India) Ltd. NLC India is signing a MoU with BHEL. The proposed surface coal gasification projects are planned to be set up in West Bengal, Odisha, Chhattisgarh, Maharashtra and Tamil Nadu.

National: Power

Making electricity prices flexible will be harmful: Delhi deputy CM

15 October: Deputy Chief Minister (CM) Manish Sisodia said making the electricity prices flexible like that of petrol and diesel would prove harmful for people and that power tariffs would never come under control. He said that if electricity rates fluctuate based on the prices of other commodities in the market, all the burden would come on the common people. The Delhi government said that electricity regulatory commissions fix the rates of electricity in their respective states considering several factors such as the expenses of the electricity companies, salaries of employees among others and the same system should continue.

Adani seeks OK to distribute power in Thane, Navi Mumbai

15 October: A subsidiary of Adani Transmission plans to foray into Thane, Navi Mumbai, Panvel and Uran to supply electricity. It has already made an application for a discom licence for these supply areas before the Maharashtra Electricity Regulatory Commission (MERC). While the matter is yet to come up for hearing, Adani Electricity said the power utility has drawn a roadmap to lay new distribution lines which could start from a few pockets in Thane and Navi Mumbai will cover the entire zones within five years. If everything works fine, the first set of Adani customers in Thane and Navi Mumbai could get a power supply from 2023. At present, MSEDCL is the sole power supplier in these areas. Adani has already conducted a field study of Thane and Navi Mumbai and expects to increase their consumer base once the licence is granted by MERC. The process will involve MERC seeking suggestions and objections from various stakeholders, including consumers. Consumers, however, welcomed competition as some of them felt that this could improve the quality and reliability of power supply.

Tamil Nadu makes Aadhaar mandatory to avail electricity subsidy

13 October: The Tamil Nadu government has made linking of Aadhaar with electricity consumer number mandatory to avail subsidy, including 100 free units for all domestic consumers. The government has said that an eligible individual desirous of availing benefits of the subsidy schemes is required to furnish proof of possession of Aadhaar number or undergo an Aadhaar authentication.

National: Non-Fossil Fuels/ Climate Change Trends

India-led alliance bats for diverse solar energy market

18 October: For countries to transition away from fossil fuels and toward cleaner energies like solar power, supply chains for components need to be more geographically diverse. Currently, 75 percent of components needed for solar power are manufactured in China, according to a recent report by the International Energy Agency. Launched by India and France at the 2015 Paris climate conference, the ISA (International Solar Alliance) aims to promote the use of solar energy as countries look to reduce their fossil fuel use to curb global warming. And although China has invested over US$50 billion in new solar supply capacity – ten times more than Europe − and created more than 300,000 manufacturing jobs, it is not part of the alliance. Industry experts said that a diversified supply chain can also increase employment, grow economies, encourage innovations, provide energy security as well as help countries achieve their climate goals. The Indian federal government recently approved funding to the tune of US$2.6 billion for a production-linked incentive scheme that would encourage domestic solar module manufacturing.

India’s airports adopting green energy fast

17 October: India is going big on its commitment regarding net zero emission and switching as fast as possible to green energy in every sphere of business. In tune with this mission, several Indian airports are switching to green energy and the Centre has kept a target of turning 90 airports into carbon neutral by 2024. India aims to reach net zero emissions by 2070. In June this year, the international airport in New Delhi adopted green energy, using only hydro and solar power for all its energy needs. The Delhi International Airport Limited (DIAL), a GMR Infrastructure Limited-led (GIL) consortium, which manages and operates the Delhi airport, has signed a long-term power purchase agreement (PPA) with a Himachal Pradesh-based hydropower producing company for the supply of hydroelectricity for the airport until 2036. Since 1 June, the Delhi airport has adopted renewable energy use from the hydropower plant for its demand of the remaining 94 percent, thus ending its dependency on non-renewable power. This move will help Delhi airport in the reduction of indirect energy emissions of a whopping 200,000 tonnes of CO2 (carbon dioxide) every year.

India to have over 65 percent power capacity from non-fossil fuels by 2030: Singh

17 October: India will have more than 65 percent of its power generation capacity from non-fossil fuels by 2030, Power and New & Renewable Energy Minister R K Singh said. He explained that India is aiming for 65 percent of its power generation capacity from non-fossil fuels but the country will have more than that. India will have 90 GW of solar equipment manufacturing capacity by 2030, up from 20 GW at present, he said. He informed that about 15-20 GW of solar equipment manufacturing capacity is under construction and India will have 40 GW of such facilities under Production-Linked Incentive Scheme-II (PLI-II). He stated that the country has already 170 GW of renewable energy (including large hydro), while another 80 GW is under construction. India has planned to have 500 GW of renewable energy by 2030. He said the industry has evinced interest in 25 million tonnes (MT) of green hydrogen capacity.

Rajasthan leads in the solar energy sector with new investments

15 October: Having emerged as the country’s solar hub after developing 10 GW solar power capacity, Rajasthan is attracting new investments in the field of renewable energy. A Memorandum of Understanding (MoU) was signed between Coal India Limited and Rajasthan Vidyut Utpadan Nigam (RVUN) for setting up a 1,190 MW solar power project. Chief Minister Ashok Gehlot said on the occasion that the investments were continuously pouring in because of the State government’s new solar and wind energy policies and simplification of rules. The Coal India Limited and RVUN will jointly set up a solar park in Bikaner district’s Poogal tehsil with an investment of INR 54 bn. The equipment required for the solar plant will be manufactured within the State, while the new project will ensure uninterrupted power supply to the consumers and reduce pollution by saving coal. Rajasthan has occupied the first position in solar power generation by setting up the projects of 14,825 MW. The State government is also making efforts to connect people with solar energy and encouraging them to install solar rooftop plants at their houses, factories and offices.

India’s green energy firms join hands to develop carbon-credit market

12 October: India’s green energy companies, such as Adani Greens, owned by billionaire Gautam Adani’s Adani Group, and carbon offsetters like EKI Energy Services, have come together to develop a carbon credit market to help achieve energy transition goals. India is one of the world’s biggest greenhouse gas emitters and it aims to reach net zero emissions by 2070. Prime Minister Narendra Modi wants India to become an industrial powerhouse while also cutting emissions by 60 million tonnes (MT) a year by 2030, highlighting the importance of a robust carbon trading market. It aims to act as a mediator between government and industry to facilitate the trade of carbon credits which would imply increased carbon neutral growth, Manish Dabkara, president of the newly formed Carbon Market Association of India, said. The lower house of parliament passed an Energy Conservation (Amendment) Bill 2022 in August that seeks to establish carbon trading. Under a carbon trading scheme, government and private entities can earn carbon credits by reducing their greenhouse gas emissions. The same credits can be bought and sold in markets.

International: Oil

Guyana opens tender for its first oil refinery

17 October: Guyana has called for proposals to design, finance and build a 30,000 barrel per day (bpd) oil refinery, the first for the South American country as it becomes a force in crude oil production. Construction work on the facility, to be located on public land near the Berbice river, is expected to begin by the first half of 2023 with project completion two years after. Requests are due in mid-December. An Exxon Mobil-led consortium has ramped up oil and gas output to almost 400,000 bpd this year, a rapid increase for a country that only inaugurated crude production in 2019. All output is currently exported.

Iran starts refining crude oil in Venezuela: Iranian Petroleum Minister

17 October: Iranian Petroleum Minister Javad Owji has said that Iran has started refining its crude oil in Venezuela. Iran had started processing nearly 100,000 barrels per day of its crude in Venezuela’s El Palito refinery, Owji said. Jalil Salari, Head of NIORDC (National Iranian Oil Refining and Distribution Company), said that efforts are underway to expand Iran’s refinery operation in overseas projects. Iran signed a US$116 million contract with Venezuelan state oil firm PDVSA in May to repair and expand the refinery.

Norway’s Equinor may buy UK oilfields from CNOOC

17 October: Norway’s Equinor is considering buying oilfields in the British North Sea from China’s CNOOC, including a big stake in the huge Buzzard oilfield. The deal is valued at between 20 billion and 30 billion Norwegian crowns (US$1.9 billion-US$2.8 billion), and might close as swiftly as the end of this year.

Kazakhstan sees the Kashagan oil field resuming oil output of 400k bpd by end-October

13 October: Kazakhstan’s Energy Minister Bolat Akchulakov said that the giant offshore Kashagan oilfield will resume production of 400,000 barrels per day (bpd) by the end of October after maintenance. He said that all three mooring points at the Black Sea terminal of the Caspian Pipeline Consortium (CPC) will likely resume operations before the end of this month. Production at Kashagan, one of the world’s largest oil fields, sharply declined on 3 August due to a gas release. Kashagan had planned to boost output to 500,000 bpd after upgrades. The Kashagan consortium includes Eni, ExxonMobil, CNPC, Shell, TotalEnergies, Inpex and Kazakh state energy firm KazMunayGas. He said that Kazakhstan currently exports some 11-11.5 million tonnes of oil per year to China, with a pipeline capacity of 20 million.

International: Gas

Nord Stream ruptures revealed as Europe grapples with gas plan

18 October: Damage to the Nord Stream gas pipeline from Russia to Europe was caused by powerful explosions, Danish police said, echoing earlier findings into leaks that erupted in the network under the Baltic Sea and that have been blamed on sabotage. Dwindling flows of gas from Russia, which once supplied 40 percent of Europe’s needs, has left the European Union (EU) struggling to unite over how to respond to surging prices that have deepened a cost-of-living crisis for families and businesses. The European Commission proposed a package of emergency measures to tackle high energy prices, including for EU states to start jointly buying gas. But it avoided proposing an immediate price cap on gas amid splits over the idea.

China halts LNG sales to foreign buyers to ensure own supply

17 October: China has asked its state-owned gas importers to stop reselling LNG (liquefied natural gas) to buyers in Europe and Asia as it seeks to ensure its own supply for the winter season. China’s National Development and Reform Commission (NDRC) has asked PetroChina Co, Sinopec and Cnooc Ltd to keep winter cargoes for domestic use. Chinese authorities said the country would greatly increase domestic energy supply capacity and its reserve capacity for key commodities, reiterating a policy of ensuring supplies and stabilising prices of raw materials.

Nigeria LNG force majeure may cause sourcing disruptions: Portugal’s Galp

17 October: Portugal’s oil and gas company Galp Energia said it may face additional sourcing disruptions after Nigeria LNG (liquefied natural gas) declared force majeure due to widespread flooding. Galp Energia said it had received a notice from Nigeria LNG (NLNG), its main natural gas supplier, about the force majeure but said “no information was provided to support an assessment of potential impacts”. The declaration of force majeure could worsen Nigeria’s cash crunch and will curtail global gas supplies as Europe and others struggle to replace Russian exports due to the invasion of Ukraine in February. Portugal’s Environment and Energy Minister Duarte Cordeiro said the southern European nation could face supply problems this winter if Nigeria does not deliver all the LNG it is due to. Last year, Portugal imported 2.8 billion cubic metres of LNG from Nigeria, or 49.5 percent of total imports, while the United States (US) was the second-largest supplier with a share of 33.3 percent.

Czechs, Germans close to deal on gas sharing in crisis:  Czech Industry Minister

17 October: The Czech Republic and Germany are close to reaching an agreement on sharing gas in times of emergency, Czech Industry Minister Jozef Sikela said, as the countries seek to bolster energy security amid dwindling supplies of Russian gas. Bilateral pacts are a part of the European Union plans to cope with any gas supply shock, although deals have been slow to materialise. Sikela said the two countries had defined conditions under which they would start sharing gas as well as what compensation the Czech Republic would pay Germany for use of the mechanism, without disclosing further details. Germany had been a large destination and transit country for Russian gas supplies before Moscow began reducing exports to the European Union in the wake of its invasion of Ukraine and subsequent sanctions from Brussels.

EU leaders set to explore gas price cap options

16 October: European Union (EU) leaders meeting will explore a range of options for gas price caps, over which they have been divided for weeks, according to a new draft of conclusions for the 20-21 October summit. The EU’s 27 countries have been deadlocked for weeks over whether and how to cap gas prices as part of efforts to tame soaring energy prices, as Europe heads into a winter of scarce Russian gas, a cost of living crisis and a possible recession. Gas prices have soared as Russia slashed flows to Europe following its invasion of Ukraine and the Western sanctions imposed on it – prompting most EU countries to call for a gas price cap, although they disagree on its design.

Germany starts receiving gas directly from France

13 October: Germany received the first direct gas deliveries from France through a pipeline link under a deal aimed at helping both countries cope with current energy supply problems, the French grid operator GRTgaz said. France, which is less exposed to Russian imports than its eastern neighbour as most of its needs are filled from Norway and through LNG deliveries, will at first deliver 31 gigawatt hours (GWh) per day, using a pipeline in the Moselle region, GRTgaz said. The maximum capacity of the new gas link is 100 GWh/d, the operator said.

Egypt is set to take part in developing Gaza’s offshore gas field

12 October: Egypt is aiming to take over development of Gaza’s offshore natural gas field, in what would be a boost for the cash-strapped Palestinian economy. While Egypt and Israel have been producing gas in the eastern Mediterranean for years, the Gaza Marine field, about 30 km (20 miles) off the Gaza coast, has remained undeveloped due to political disputes and conflict with Israel, as well as economic factors. The project was last in the hands of oil major Shell, which gave up its stake in 2018. The Palestinians have been looking for a new foreign group to take over. Egypt’s gas company EGAS began talks last year with the Palestine Investment Fund PIF and the Consolidated Contractors Company CCC, is a coalition of companies that are licensed to develop the field.

Chevron sees LNG growth opportunity in Europe on strong demand

12 October: US (United States) oil major Chevron Corporation expects high European prices for liquefied natural gas (LNG) to attract a majority of US LNG exports in the short term. Europe is determined to wean itself off Russian gas imports following its invasion of Ukraine, a move that has thrown open the door to US suppliers. Its commitment to building import terminals and regasification facilities shows the region’s demand for US exports could last. Chevron is a large natural gas producer globally, last year pumping more than 7.5 billion cubic feet per day with more than half of its gas production in the US and Australia. The major producer produces LNG in Australia and Angola, and recently carved out a foothold in US LNG through purchase agreements with LNG producers Cheniere Energy Inc and closely-held Venture Global LNG. The US is the world’s top gas producer with output near 99 billion cubic feet per day (bcfd), but as consumption is lower, at about 89 bcfd, there is room for rising exports with expanding production. Chevron is also studying options to “commercialise” more gas from an Eastern Mediterranean field, off the coast of Israel, either through existing pipelines or some LNG alternatives.

International: Coal

Indonesia’s PLN in talks with investors over early retirement of coal plants

18 October: Indonesia’s state utility Perusahaan Listrik Negara (PLN) is in negotiations with US (United States) and European investors to help finance an acceleration scheme for its coal power plant retirement. PLN is targeting reaching net zero carbon emission by 2060 and planning the early retirement of coal plants with a collective capacity of 10 gigawatts (GW). As of 2020, PLN had 63.3 GW of installed power capacity with 50 percent coming from coal-fired plants. Some of PLN’s coal capacity would come to natural retirement in 2044, but the company could expedite the phasing out by a decade with affordable financing at a 2.5 percent to 3 percent rate.

Portugal bets all on renewables after abandoning coal

17 October: As the UN (United Nations) steps up calls to make the switch to renewable energy to fight the global climate emergency, Portugal is among the first European Union (EU) countries to abandon coal. It has been nearly a year now since the smoke has trailed up from the cooling towers of the coal plant in Pego, 120 kilometres (70 miles) northeast of the capital Lisbon. The lights are off at the station, and the dust gathering on the steel structure attests to the fact that the last coal plant in Portugal shut down in November last year after 30 years in service. The authorities in Lisbon shut down this fossil-fuel eight years sooner than planned — and just months after the Sines coal plant, some 90 kilometres south of Lisbon closed at the start of 2021. Portugal is one of a handful of EU member states — along with Belgium and Sweden — to have renounced coal as an energy source. The energy crisis triggered by the war in Ukraine prompted Austria to reverse a previous decision to close coal-fired plants. The two coal plants recently closed accounted for nearly 20 percent of Portugal’s greenhouse gases. To replace coal’s contribution to electricity production, the government hopes to continue developing its green energy to provide 80 percent of its energy by 2026, up from 40 percent in 2017.

International: Power

Portugal to raise regulated electricity prices by just 2.8 percent in 2023

18 October: Portugal’s electricity regulator ERSE proposed to increase by just 2.8 percent the regulated prices for hundreds of thousands of households and small businesses, protecting them from soaring prices in the Iberian wholesale market. The limited electricity price increase would have an effect on Portuguese inflation which stands at levels close to a three-decade high lifted by soaring energy prices as the country, like most of Western Europe, depends on imports for oil and gas. Regulated prices are expected to rise by an average of 1.8 percent this year, after similar regulatory containment measures. In Portugal, prices regulated by ERSE remain fixed throughout the year, although they can be revised quarterly to a limited extent. The limited regulated price increase in 2023 helps around 925,000 Portuguese consumers with contracts based on the price, mainly households and small businesses, ERSE said. They represent about 15 percent of the total 6.4 million customers in the country. Spain and Portugal capped the price of gas used in power generation in June and have electricity wholesale prices much lower than other European countries. Still, ERSE said that on the wholesale Iberian market MIBEL the average price of electricity in 2023 is expected to rise to 262.06 euros per megawatt hour, compared to around €107 currently. Portuguese households and small businesses can move freely between contracts with regulated and market prices.

US power use to reach record high in 2022 as the economy grows, weather hotter: EIA

12 October: United States (US) power consumption will rise to a record high in 2022 due to rising economic activity and hotter summer weather, the US Energy Information Administration (EIA) said. EIA projected power demand will climb to 4,034 billion kilowatt hours (kWh) in 2022, from 3,930 billion kWh in 2021, then slide to 4,001 billion kWh in 2023 as temperatures moderate. That compares with an eight-year low of 3,856 billion kWh in 2020, when the coronavirus pandemic depressed demand, and an all-time high of 4,003 billion kWh in 2018. EIA projected 2022 power sales would rise to 1,507 billion kWh for residential consumers, 1,372 billion kWh for commercial customers as more people return to work in offices and 1,013 billion kWh for the industrial sector. That compares with all-time highs of 1,477 billion kWh in 2021 for residential consumers, 1,382 billion kWh in 2018 for commercial customers and 1,064 billion kWh in 2000 for industrial customers.

International: Non-Fossil Fuels/ Climate Change Trends

Qatar inaugurates first solar plant worth US$467 mn

18 October: Gas-rich Qatar inaugurated its first solar power plant stretching across the desert, a vast site planned to provide up to 10 percent of the Gulf nation’s energy supply. The solar farm in Al-Kharsaah, west of the capital Doha, is “one of the biggest” in the Middle East, the emirate’s energy minister and president of QatarEnergy, Saad Sherida Al-Kaabi said. It was launched in 2016 in partnership with France’s TotalEnergies and Japan’s Marubeni as part of a broader push by Qatar — one of the world’s biggest producers of liquefied natural gas (LNG) — to invest in solar energy. The project, at 1.7 billion Qatari riyals (US$467 million), consists of some 1.8 million solar panels and covers an area of more than 10 sq. km. During the day, sun-tracking technology moves the panels to ensure maximum solar exposure, while at night, robotic arms clean off the dust. Qatar, while lagging behind other Gulf states in the solar race, has announced a target of 5 GW of solar energy capacity by 2035. Saudi Arabia has also announced a target of 5 GW of solar energy capacity, but vowed to reach it by 2030.

China needs US$17 trillion in investments to meet climate goals: World Bank

12 October: China needs up to US$17 trillion in additional investments for green infrastructure and technology in the power and transport sectors to reach net-zero emissions by 2060, a new World Bank report on China’s climate and development challenges found. The report said China – the world’s second-largest economy – would need private investment to cover the immense price tag and unleash the needed innovations. Climate change poses a significant threat to China, especially its densely populated and economically critical low-lying coastal cities, and unabated climate change could cut its economic output by 0.5 percent to 2.3 percent as early as 2030, according to the report. It would also be impossible to reach global climate goals without China transitioning to a low-carbon economy, the report said, noting that China emits 27 percent of global carbon dioxide and a third of the world’s greenhouse gases.

This is a weekly publication of the Observer Research Foundation (ORF). It covers current national and international information on energy categorised systematically to add value. The year 2022 is the nineteenth continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485.

Disclaimer: Information in this newsletter is for educational purposes only and has been compiled, adapted and edited from reliable sources. ORF does not accept any liability for errors therein. News material belongs to respective owners and is provided here for wider dissemination only. Opinions are those of the authors (ORF Energy Team).

Publisher: Baljit Kapoor

Editorial Adviser: Lydia Powell

Editor: Akhilesh Sati

Content Development: Vinod Kumar

For more energy insights follow the links below:    

  1. Hydrogen: Versatile Zero Carbon Energy Carrier
  2. Tax revenue from petroleum products in India: Golden eggs that may kill the goose?
  3. Challenges in Optimising Power Demand & Supply
  4. India’s Natural Gas Exchange: One Small Step or a Giant Leap?
  5. Natural gas in India: From Cinderella to Goldilocks (May 2020)
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.